Housing Market Update

Watching the numbers

Around eight months ago, a friend of mine retired from the military after 25 years and moved his family to Roanoke. They planned to stay with the in-laws until they found the right house. With an above-average budget, and not too many “must haves” they expected to have a house under contract within a few weeks. Not long after they moved to Roanoke, they made an offer on a house, a generous offer above the listing price, but it was not accepted. The sellers accepted another offer and the house sold to a couple from out-of-state for $75,000 over the asking price. They are continuing their search, but it’s heading toward a year now and my friends are still living with the in-laws.

Many have found themselves in a similar situation, living with friends or family or in a small apartment because the sellers’ market we’re in right now is unlike anything we’ve ever experienced. What is causing this hot market even in the middle of a pandemic? The low-interest rates have sent people into a buying frenzy, which creates a high demand and a low supply - and drives up prices. Bankrate.com reports that as of April 7, 2021, a 30-year fixed mortgage rate averages a 3.32% interest rate, while a 15-year fixed mortgage rate averages 2.56%. These interest rates put more people in the market to buy a house, and eventually the inventory of houses declines.

To give a better overall picture of the real estate market, we’ll take a look at the numbers. According to the Roanoke Valley Association of Realtors, Multiple Listing Service (MLS), in March 2021, there were 629 active listings in the Roanoke Valley, with 551 homes sold. The average price of a home sold was $273,846. If we go back a year before that to March 2020, there were 1514 active listings, 499 sold, and an average sale price of $241,699. That’s 885 fewer houses on the market this March than last March, and the prices of the houses are reflecting it. The average listing price for a home in March 2021, was $463,696 and the average listing price for a home in March 2020, was $383,423, an increase of $80,273.

With numbers like that, it’s a great time to sell, but a tough time to buy. The question everyone asks me is when is it going to end? When will the market return to normal? That is something no one knows. Some call it a bubble similar to the housing bubble that burst in 2007, while others are more optimistic and think it will eventually level itself out. I’m on the optimistic side - but all we can do is keep watching the numbers.

Low interest rates have sent people into a buying frenzy, which creates ”“ a high demand and a low supply— and drives up prices. HOUSING MARKET UPDATE

By Christopher Borba

Executive Summary:

A new column with a different perspective on the real estate market - by the numbers.

Chris Borba, MBA is a buyer's agent and a real estate investor. Reach him at chris@ myroanokehome.com